Nokia has problems. Smartphone problems. Software problems. American problems. But to fully understand what's wrong, we've got to understand what's been right, or to put in another way, what's distracted Nokia. Meet the most popular phone in the world.

Didn't you notice? It was just Nokia World! The celebration of all things Finnish and phones.…
Read more Read more

It has been said that more of the world's population has access to a cellphone than to a sanitary toilet. But of the planet's estimated 5 billion cellphone users, a privileged minority have smartphones; a paltry few, iPhones.

If you spend hours thumbing through pages of apps, scoffing at less-than-perfect software upgrades and grousing about screen resolution and pixel density, it's easy to forget that the very concept of a mobile phone is a miracle. It's a device that shrinks your day to day world into a single point, making you simultaneously accessible to and able to access nearly everyone you know, instantly and everywhere.

One summer in 2005, a man in Nigeria wanted in. He found a shop, put his money down on the counter, and left with a cellphone: a Nokia 1100, nearly identical to the model discontinued by AT&T that same year. Statistically, this was likely his first handset. He'd probably used a similar one through family or friends. Personal milestone or not, the tiny Clarkian miracle of that day represented a cold milestone for Nokia. It was their billionth phone sold.

In buying that phone, this man was joining a slightly smaller club. He became a Nokia 1100 user. Along with a staggering 250,000,000 others, he had traded up in the communications world, from little or no phone access at all to this little brick of a phone.

***

The 1100 is not pleasant to use. The keypad is too narrow for two-thumbed texting; it's thin enough that curling a thumb for one-handed use is strenuous. Tiny pedestal buttons are concealed behind a squishy rubber shield, and configured in such a way that learning how to use the phone is a process of rote memorization and habit-building rather than intuition.

The phone wasn't exactly a technological marvel, even by the standards of the time. (For perspective, in 2003 Gizmodo was writing breathlessly about the promise of the Palm Treo 600—a real smartphone.) The screen is small and the pixels large and monochrome. The ringer is both tinny and piercing. The whole assemblage feels suspiciously light.

I say this all as someone coddled by smartphones, touchscreens, and the results of years upon years of careful and expensive interface research, but also as someone who has used a hell of a lot of phones. For a few years years I carried a Nokia 3595—a not-so-distant relative of the 1100—so the 1100 doesn't feel exotic to me, nor should it to most anyone.

But I was never really meant to buy a Nokia 1100, and its designers never meant to impress me. The phone's small size makes its extremely portable, and easy to carry or stow. That narrow, squishy keypad is dustproof and water resistant, so a splash of rain or a drop in the sand won't ruin it. The phone's plasticky shell and light weight make perfect sense the first time you see it bounce off your tile floor, skittering to a stop unscathed. The menu system and button configuration might clash with my design sensibilities, but I was raised on PCs and Nintendo. I have expectations of polish, and can mistake brutal simplicity for lack of design.

This phone was meant to survive and to do; its only jobs are to call and to text and to create convenience for as long as possible, as cheaply as possible. "The way we get to those features is by spending a lot of time with consumers, with teams in their homes, interviewing them, seeing how they live," says Alex Lambeek, who, prior to becoming Nokia's VP of Phone Marketing, worked extensively with hardware design for the developing world. "Take for example a feature like a torch (flashlight), and you might think: Who cares about a torch? Well, for a consumer who lives in an area, let's say, of India or Indonesia or Africa, where there is either no power supply or power is intermittent, having a torch is pretty important."

Likewise, accessories and services aren't cast-offs from the Western world, but specifically adapted for their environments. Alongside new cellphones you'll see chargers that draw power from bikes, and by sending an SMS to a specific, Nokia-operated number, you can get a listing of local crop prices, or a weather forecast.

A phone sold in an outdoor market can't exactly be brought back for a warranty claim. Software updates are mostly out of the question, so the phone you buy is the phone you'll be stuck with. Customer service is complicated by language differences, literacy issues and simple lack of awareness, so a short sort of troubleshooting guide has to be included in the phone's software.

The lesson, basically, is that a company won't do well in the developing world simply by hawking cheap, out-of-date hardware after it's become obsolete in places like America. Companies like Nokia, LG and Samsung spend a lot of time and money developing new phones that you and I might consider old-fashioned or odd, and with good reason: Emerging markets are huge. The 8th, 9th and 10th largest phone seller in the world, by volume, are companies you've never heard of—ZTE, G-Five and Huawei—which have made heaps of money selling millions of customers their first phones. Nokia is actually losing share in India, largely due to a burgeoning domestic phone industry, led by companies whose spectacular sales volumes belie their newness. They'd be stupid to try to sell their cast-off dregs to hyper-competitive exploding markets like this.

***

The hardware demands of the developing world are different. That much is obvious. Making things even more difficult is the way people sell phones outside of the US and Europe. Surprise! It's also different. "In North America and many parts of Europe, operators typically subsidize handsets," says Lambeek. It's a familiar, unwieldy system of blood contracts and extravagant hardware. It's why we tend to loathe our carriers, and also why you can get a Droid for $150. But it's by no means universal. "That is quite rare in places like Africa, for the simple reason that the economics of subsidizing don't make sense. Either the money doesn't come, or it takes far too long." This means that the price of the phone isn't distorted by subsidies, and that the operators are barely involved in phone distribution at all.

This makes things less complicated in a lot of ways, and more complicated in others. Phones have to be cheap enough that people can buy them outright, which basically renders all high-end smartphones like BlackBerrys or iPhones, which can cost well over $500 unsubsidized, almost comically inaccessible. It also means that phones need to be standardized and network-neutral, or unlocked, and that they have to work with whatever services are popular or available, be they voice or text or internet.

***

The developing world has no interest in the iPhone. It's impractically delicate and expensive, and its battery lasts a day, if you're lucky. But the concept of a smartphone is in some ways as attractive in rural Nigeria as it is anywhere else.

Companies like Huwei are already refiguring the Android phone equation to suit second-time phone buyers, and bringing prices for unsubsidized touchscreen smartphones well under $200, edging ever closer to $100. Nokia's C3 series has Wi-Fi, a 2.0MP camera, a full, metal-keyed QWERTY keyboard, microSD storage and an App Store. It comes with Facebook and Twitter access out of the box. Depending on tariffs, it sells for around $100 worldwide. It's coming to America, soon making an appearance on Wal-Mart's shelves. The price? $80. It's the anti-N8: Fairly simple, very cheap, and so far, wildly popular.

Spotted in Indonesia: at least 63 people queuing for Nokia's QWERTY-equipped C3 phone. Anyone…
Read more Read more

This is what the next generation of the mega-selling phone will look like. They'll be rough facsimiles of the high-end smartphones forged for well-heeled buyers, stripped of fat and excess—an embodiment of compromise. They'll be 90% of the phone for 20% of the price, with FM radios instead of digital music stores, and flashlights instead of LED flashes. This is how the other half will smartphone, if you want to be so generous as to call the developing world's users a half. We're not even close.